The cheapest Xbox 360 you can pick up from a store today is $199. But that is about to get cut in half by Microsoft if you agree to sign up for a 2-year subscription.
Apparently the deal will be made available through Microsoft’s own stores initially. It will see you pay $99 up front and then $15 per month for a minimum of two years. In return you get an Xbox 360 4GB console with Kinect plus a subscription to Xbox Live Gold. There’s also the promise of some additional benefits such as free content streams.
The equivalent package today including two years of Live Gold would cost you about $390. This deal saves you $290 initially, but ends up costing you a minimum of $460 before you’ve bought any games. If you don’t have the cash now, but want the console, then that may be acceptable, however, there is another problem.
Signing up for this subsidized Xbox 360 means you’ll be paying to use it until at least May 2014. By then we’ll probably have a successor to the console on store shelves. It’s possible Microsoft may offer you a way out of the subscription by purchasing a full price Xbox 720, but if they don’t there will be an early termination fee to pay.
As a subsidized hardware deal it isn’t actually that bad. The overall cost is only $70 more than you’d pay cash, but it does tie you to payments for the next 24 months. For Microsoft, it’s a way to offer their hardware as the cheapest console on the market, and they are sure to push that in marketing for the deal.